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A point-of-purchase sample given to consumers is a good example of sales promotion.
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A cooperative advertising program can help a producer achieve coordination and integration of ad messages in the channel of distribution.
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A salesperson who completes routine sales made regularly to target customers is an order taker.
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The idea behind a pulling policy is that customer demand helps to pull the product through the channel.
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Producers of business products generally spend a larger percent on advertising than do producers of consumer products.
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Integrated direct-response promotion has expanded beyond direct-mail advertising to include other media.
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Regarding sales force compensation, straight salary gives the most security for a salesperson, while straight commission gives the most incentive.
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A complete promotion blend may need to consider channel members (along the channel) as well as customers (at the end of the channel).
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Some advertising media are “must buys” because they are obvious choices to reach the target audience
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The AIDA sequence can help a sales manager evaluate a possible sales presentation.
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A chemical company might use institutional ads to highlight its concern for the environment.
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Promotion is communicating information between seller and buyer to influence buyer attitudes and behavior.
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The price most consumers expect to pay for a product is called the leader price.
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The adoption curve concept suggests that some groups within a market tend to be leaders in accepting new ideas.
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A firm’s total cost increases only when its variable cost increases.
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If a firm’s demand curve is fairly elastic, a penetration pricing policy would be more suitable than a skimming pricing policy.
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A sales forecast is an estimate of how much an industry or firm hopes to sell to a market segment.
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A salesperson who aggressively seeks out possible buyers with a well-organized sales presentation designed to sell a product is a missionary sales rep.
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Order takers should work on improving the whole relationship with the customer, not just on completing a single transaction.
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Advertising can be useful in a marketing strategy for getting attention, holding interest, arousing desire, and obtaining action.
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Early adopters are respected by their peers–and often are opinion leaders–so what they think about a product is especially important for reaching later adopter groups.
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Firms in monopolistic competition may favor mass selling because they have differentiated their marketing mixes and have something to talk about.
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Many middlemen seek advertising allowances from manufacturers to help them pay the cost of advertising the products they sell.
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During the market maturity stage of the product life cycle, the basic promotion objective is persuading.
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Basic list prices are the prices that final consumers or users are normally asked to pay.
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As output increases, a firm’s average fixed cost probably will go down.
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Order getters are even more important for business products than for consumer products.
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A salesperson’s main task might be order getting, order taking, or supporting, but sometimes one salesperson does all three tasks.
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Direct spoken communication between sellers and potential customers is personal selling.
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Status quo pricing objectives might focus on meeting competition, avoiding competition, or stabilizing prices.
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A good order getter tries to sell solutions to the customer’s problems–not just physical products.
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Monopolistic competition may result in high costs–and therefore it does not do a good job of serving consumers the way they want to be served.
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A firm that adopts the integrated marketing communications concept tries to coordinate all of its promotion communications to a target customer to convey a consistent and complete message.
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For communication to be effective, there must be a common frame of reference between the source and the receiver.
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The three general promotion objectives of informing, persuading, and reminding are all concerned with providing more information.
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Pricing objectives and policies should flow from company-level objectives.
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A profit maximization pricing objective may lead to relatively low prices, especially if demand is very elastic.
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In addition to mail, direct-response promotion may include telephone, print, e-mail, and the Internet.
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A target return pricing objective seeks to obtain a specific level of profit–often stated as a percentage of sales or return on investment.
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The “consultative selling” sales presentation is fast and requires little skill.
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A marketing plan usually spells out the time schedule for a marketing strategy as well as the time-related details.
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“Noise” in the traditional communication process is any distraction that reduces the effectiveness of the communication process.
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A good marketing strategy will work well throughout the different stages of the product life cycle.
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“Meeting competition” in “good faith” is allowed as a defense in price discrimination situations.
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Stocking allowances are given to a middleman to get shelf space for a product.
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Most sales managers offer their salespeople a “combination plan” because this method of compensation provides a balance between incentive and security.
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Leader pricing is typically used with well-known, widely used items which are not stocked heavily by consumers.
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The term “3/10, net 30” means that a 3 percent discount off the face value of the invoice is allowed if the invoice is paid within 10 days, and that otherwise the full face value is due within 30 days.
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The basic idea behind integrated marketing communications is that it is critical for all of the different firms in a channel of distribution for a product to have an input in developing the advertising campaign for the product.
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“Demand-backward pricing” involves a producer estimating an acceptable final consumer price and working backward to determine what the producer can charge in the channel.
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“Pushing” a product through a channel relies on very aggressive promotion to final consumers to try to get them to ask middlemen for the product.
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Aggressive spending on promotion can usually make up for other types of mistakes.
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Market potential refers to how much a whole market segment will buy while sales forecast refers to how much one firm hopes to sell to that market segment.
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Good salespeople try to help customers buy by presenting both the advantages and disadvantages of a product–and showing how it will satisfy the customer’s needs.
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Profit maximization objectives lead to high prices and monopolies–and are generally not in the public interest.
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A sales manager who wishes to supervise and control his salespeople’s activities closely should pay them a straight salary instead of a straight commission.
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Firms with high markups and low turnover rates may earn lower profits than firms with low markups and high turnover rates.
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Most firms operate in monopolistic competition instead of pure competition.
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Advertising is any paid form of nonpersonal presentation of ideas, goods or services by an identified sponsor.
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Flexible-price policies are most common in the channels and in direct sales to business customers because sales reps may need to make adjustments for market conditions
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A firm should not simply assume that its profits will grow if its sales grow.
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A flexible-price policy is most often used where products are not standardized and where bargaining is common.
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The Federal Trade Commission can require firms to use “corrective advertising” or “affirmative disclosures,” if it decides a particular advertisement is unfair or deceptive.
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When a firm’s advertising says “our motorcycles will outperform any other brand,” it is using competitive advertising to develop selective demand.
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The message channel may be as important as the message itself in influencing the receiver.
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A low penetration price discourages competitors from entering the market.
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Turning a strategy into a profitable business usually requires money, people, and other resources, such as production capacity, as well as a marketing plan.
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When the target market is large and spread out, mass selling may be less expensive than personal selling.
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When a seller uses “zone pricing,” all customers who are in the same zone are charged the same freight charge–even if the actual shipping cost varies.
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A marketing manager can choose from only two promotion methods–personal selling and mass selling.
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Retail order getters are usually needed for unsought products, and are desirable for some shopping products.
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A sales-oriented pricing objective seeks some level of unit sales, dollar sales, or share of market–without referring to profit.
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The informing objective in Promotion is simply a matter of educating the consumer about the firm’s product.
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Promotion to business customers emphasizes personal selling.
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Meeting competition and nonprice competition are both status-quo objectives.
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Comparative advertising makes specific brand comparisons using actual product names.
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Average fixed costs are lower when a large quantity is produced.
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Personal selling involves direct spoken communication between sellers and potential customers.
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Sales promotion can be aimed at middlemen, at final consumers, or even at a firm’s own employees.
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Mass selling is not as pinpointed as personal selling, but it can be a lower cost way to reach large numbers of potential customers at the same time.
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Product advertising tries to sell a specific product, while institutional advertising tries to develop goodwill or improve an organization’s relations with various groups.
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Agent middlemen–particularly manufacturers’ agents and brokers–are often order getters.
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A seasonal discount encourages buyers to stock products earlier than present demand requires.
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In total, advertising costs much less than personal selling and sales promotion.
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Items with lower markups may be more profitable–if the stockturn is higher.
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Even though the cost per person may be higher and the number of persons reached may be smaller, specialized media is sometimes more effective than mass media.
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The basic job of pioneering advertising is to persuade, not inform.
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In the traditional communication process, a receiver tries to deliver a message to a source through a message channel.
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The AIDA model focuses on markets as a whole while the adoption curve model focuses on individuals.
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Salespeople often are responsible for representing the customer inside their own company as well as representing their company to the customer.
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